Conversion Factors Drop,but Work Values Increase
Published on Sat Feb 01, 2003
CMS has announced a reduction in the national Physician Fee Schedule conversion factor to $34.5920 for 2003, down from $36.1992 for 2002.
CMS announced the proposed Medicare Part B conversion factors last summer, and the news for anesthesiologists and other providers wasn't good. The final ruling is slightly better than the proposed one but still calls for decreased reimbursement across the board. Medicare Conversion Factor Affects Pain Management Practitioners The Medicare conversion factor is a designation of what Medicare will pay per unit for any given procedure. This conversion factor is the base dollar amount that Medicare and some other carriers multiply by the relative value units (RVUs) of each procedure to calculate the national payment rate for procedural codes. This is important to anesthesia practitioners because carriers often reimburse pain management services such as 64400-64484 (diagnostic or therapeutic nerve blocks) or 20552-20553 (trigger-point injections) based on the overall conversion factor. Anesthesia's Decrease Is Slightly Better Because Medicare bases anesthesia reimbursement on procedure units plus time units (instead of only RVUs) for each procedure, anesthesia has its own conversion factor (ACF). The 2003 national anesthesia factor is $16.0353, down from $16.60 for 2002. This is slightly better than the proposed national average conversion factor of $15.84 but still represents a 3.43 percent decrease in conversion value. The ACF has decreased more than 10 percent over a two-year period (CMS decreased the factor 6.9 percent in 2002).
Although the ACF is set, the actual factor used by anesthesia providers can vary depending on their practice location. The area's cost of living, business expenses, insurance expenses and other variables combine to create these local ACFs.
For example, Northern California is divided into six localities. Each locality has its own ACF, ranging from $17.54 in San Francisco County to $15.91 for the area including Fresno, Monterey, Sacramento, Santa Cruz and other counties. Smaller or less populated states such as Montana or New Hampshire may have the same conversion factor statewide, but it is often still below the national average factor. Anesthesia Work Values Also Change CMS also published its final decision regarding increased anesthesia work values as part of the 2003 fee schedule's final ruling.
Federal law requires CMS to review RVUs at least every five years to ensure that they are on par with current services and technology. Not all anesthesia services have a work RVU, so carriers use the conversion factor as its basis of payment. CMS bases the ACF on anesthesia work value and practice expense. Changes in these variables affect the anesthesia conversion factor and payment for all anesthesia services. CMS divides anesthesia services into five components, assigning each component a value. (The five components are preoperative evaluation, equipment [...]
